What is Real-Time Bidding (RTB) and How Does it Impact Programmatic Ads?

 

 

Real-Time Bidding (RTB) is a set of standards that govern the real-time exchange of advertisements between publishers and advertisers. Publishers use RTB (Real-time bidding) tools to submit their ad inventory to a central location, typically a clearing house (e.g. Mediapartners).

Advertisers can search for ad slots in real time and choose to show their ads on particular websites or mobile applications.

This article will provide a high-level overview of RTB (Real-time bidding), including an explanation of how the standards work and an overview of how the technology can be used to better serve advertisers and publishers.

What is RTB (Real-Time Bidding) and Why Should You Care?

Real-time bidding (RTB) is a set of standards that govern the real-time exchange of advertisements between publishers and advertisers.

Publishers use RTB (Real-time bidding)  tools to submit their ad inventory to a central location, typically a clearing house (e.g. Mediapartners).

Advertisers can search for ad slots in real time and choose to show their ads on particular websites or mobile applications.

The advantage of RTB (Real-time bidding) is that it allows for the instant exchange of information between a publisher and an advertiser.

This means that there is minimal to no need for advertisers to manually match their ads with a specific audience, which can improve the relevancy of ad campaigns and improve performance.

And, as an advertiser, you can choose exactly where your ads are showing – down to the individual slot – which enhances campaign flexibility and optimization.

There are several key reasons why you might want to consider RTB (Real-time bidding) for your next advertising campaign.

  • An Opportunity to Retarget Past CustomersReal-Time-Bidding- (RTB)-and-How-Does-it-Impact- -Programmatic-Ads-An-Opportunity-to- Retarget-Past-Customers

Do you have a retail website that sells custom clothing and accessories? If so, you might want to consider using retargeting to keep your past customers engaged with your brand. By displaying ads on various websites and on social media platforms, you can retarget users who have been on your site in the past with ads that are relevant to their current circumstances, interests, or needs.

If your customer base uses a mix of social media and regular web browsing, you can take advantage of this by displaying ads on both platforms. This will help ensure that you are reaching your target audience and engaging with them on various devices.

  • A Way to Monetize Your ContentWhat-is-Real-Time-Bidding-(RTB)-and-How-Does-it-Impact- -Programmatic-Ads-A -Way-to-Monetize-Your-Content

get google ranking ad

If you are a content creator (e.g. a blogger) you can use your content to promote a product or service in the form of articles, videos, and social media posts.

The key advantage of this is that you can use your existing content to get the word out about a product or service without having to spend money on expensive ads or hiring freelancers to write catchy material for you.

When someone reads an informative article about fashion or lifestyle, they might not immediately click over to your online store to buy an expensive handbag.

However, if your content includes a product or service that they are interested in, they might decide to visit your site to learn more and hopefully make a purchase.

In this case, you can use online marketing to get sales without necessarily having to pay for ads that cost money to run.

Publishers can use retargeting to keep past customers engaged with their brand. If you have a retail website that sells custom clothing and accessories, you might want to consider using retargeting to keep your past customers engaged with your brand.

By displaying ads on various websites and on social media platforms, you can retarget users who have been on your site in the past with ads that are relevant to their current circumstances, interests, or needs.

How Does RTB (Real-Time Bidding) Work?

RTB (Real-time bidding) works because there is a central location (e.g. a clearinghouse) that stores and distributes ad space to advertisers. This allows for real-time bidding between interested parties (i.e. publishers and advertisers).

When an advertiser submits a bid for a specific ad slot, the clearing house finds a publisher who has that slot available and then provides that publisher with the advertiser’s contact information.

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The publisher decides whether or not they want to show the ad based on various factors, including the type of content available on their site, their budget, and their performance in previous bids for similar slots.

When a publisher finds an advertiser they like, they enter into a contract with the advertiser to show their ad in exchange for payment from the advertiser.

This whole process – from clearing to contract to payment – happens in real-time, so there is minimal to no need for manual intervention from advertisers or publishers.

When a publisher shows an advertiser’s ad, that information is immediately available in the form of a report that lists the ads that were shown and how much was spent on each one. This provides transparency into how much each campaign cost and if it was worth it in the end.

How Does RTB (Real-Time Bidding) Affect Programmatic Ads?

If you are an advertiser who uses a DSP to manage your ad campaigns, you might notice some differences in how RTB (Real-time bidding) works compared to the way things usually work. With DSPs, advertisers have complete control over when, where, and how their ads are displayed.

They can also tweak the ads to fit specific markets or audience segments. This level of control and customization makes DSPs a popular choice for advertisers who want to get the most value out of their campaigns.

With RTB, advertisers don’t have this level of control. This is because DSPs serve as the go-between for advertisers and publishers, taking the burden of matching ads with specific audiences off of advertisers’ shoulders.

This is a double-edged sword because while DSPs can be helpful in simplifying the process of getting an ad campaign up and running, at the end of the day, advertisers still need to know what audiences they are targeting and how to target them.

Additionally, through programmatic ads, you don’t need to worry about running a banner ad on a particular site. The site can be of no particular relevance to your product or service and, in fact, could be distracting or even harmful to your company’s bottom line.

This is because the ad server will determine which ads to show based on the content of the webpage the user is viewing. So, while the vast majority of users will be completely unaware that they are even viewing ads, you’ll be able to tell which ones worked and which ones didn’t base on analysis of the traffic that reached your website from that particular ad campaign.

How Is RTB (Real-Time Bidding) Different From Static Advertising?

For those unfamiliar, static advertising is when an advertiser pays for ads to appear on a website or in a magazine without any interaction from the audience.

The ads are usually displayed in the same way every time a user visits the site or opens the magazine. As mentioned, RTB (Real-time bidding) is very different because it involves interactions with the customer. So, unlike static advertisements, those placed using RTB (Real-time bidding) can be tailored to the recipient based on previous purchases and other personal information.

Even more interesting is that the recipient of the advertisement does not necessarily have to be a human. Take display advertising on social media platforms for example. An advertiser will pay to have their content displayed in a box near the top of someone’s Facebook page.

In this case, the ‘someone’ could be an in-house salesperson, a brand ambassador, or even a character from the advertiser’s Twitter account. The key takeaway from this type of example is that content and advertisements are becoming more personalized, which leads to higher engagement and lower costs.

Why Are Publishers Embracing RTB (Real-Time Bidding)?

There are a few main reasons why publishers have adopted RTB (Real-time bidding). First, it is becoming more difficult to get people to actually visit a website or open a magazine.

Consumers are growing weary of being ‘tricked’ into viewing ads or content, so they seek to avoid these types of experiences. As a result, more websites and magazines are moving to opt-in rather than opt out of ads. This means that they require the visitor to agree to receive promotional emails or notifications from the publisher or brand in order to view content.

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Opting in instead of out gives website and magazine publishers the ability to send personalised notifications to people who have expressed an interest in their content.

For example, if you are a car enthusiast and go to a website that covers automotive news, you might be sent a notification offering you special deals on vehicles from a particular brand. Or if you are a mom searching for a fun activity for your children, you might be presented with special offers for local attractions.

Another reason that websites and magazines have adopted RTB (Real-time bidding) is that it is an efficient way to buy online ads. According to HubSpot Blogs research, 40% of respondents cited ‘saving money’ as the main reason why they use RTB (Real-time bidding) versus traditional online advertising methods.

What Is the Role of Publishers In All of This?

Even though advertisers are the ones who initiate contact with a clearing house, it is the role of the publisher to determine whether or not they want to show the ad that was submitted to them. When a publisher decides to show an ad, they must provide a good reason for doing so.

If a publisher does not want to show an ad, they will most likely notify the clearing house that they do not have that ad slot available. This process of finding and then rejecting an ad is called ‘noting’ and it happens automatically as part of the RTB (Real-time bidding) process.

When a publisher notes an ad, the advertiser who submitted that ad will be notified and can either choose to resubmit their ad to another publisher or take the rejection as a sign that their ad did not perform well in the first place and try a different tactic with the same keyword or search string.

The key point to note about the role of publishers is that they can choose whether or not to show ads. This gives them a good degree of control over their marketing budget and, as a result, the opportunity to maximize their investment without risking too much money on a single advertising campaign.

Considering all of this, the role of the publisher is to provide a good user experience for their audience. If someone is looking for fashion tips or trends, they will probably land on a website or blog that is geared toward women.

If the experience on that website or blog is good and the content is relevant and interesting, the most probable outcome is that the person will leave the site/blog feeling better about themselves and, hopefully, with a takeaway that will help them achieve some of their goals.

Real-time bidding (RTB) is a set of standards that govern the real-time exchange of advertisements between publishers and advertisers. Publishers use RTB (Real-time bidding) tools to submit their ad inventory to a central location, typically a clearing house (e.g. Mediapartners).

Advertisers can search for ad slots in real time and choose to show their ads on particular websites or mobile applications.

The Impact of Real-Time Bidding On The Ad Industry

The main advantage of RTB (Real-Time Bidding) is that it allows for more flexible and personalised interactions between advertisers and customers. This means that advertisements can be more effectively targeted and the results are usually more relevant and engaging adverts.

Another advantage of RTB (Real-Time Bidding) is that it allows for more effective budgeting as the cost per acquisition is usually lower. This is because it requires fewer ads to be displayed to reach the same audience.

The disadvantages of RTB (Real-Time Bidding) are that it is less ‘traditional‘ and more ‘customer centric‘, which means that it focuses on the needs of the end user rather than the advertising agency.

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From an agency standpoint, the disadvantages of RTB (Real-time bidding) are that it is less predictable and less available than other marketing channels, which typically require more research and planning. It is also less measurable as there are fewer ‘audience impressions’ to track and analyse. However, since it is a more targeted method of advertising, it has the potential to be more effective than traditional methods.

As the name suggests, real-time bidding is all about speed and efficiency, which means that advertisers want to get their advertisements placed quickly and accurately. When an advertiser submits a bid, the adverts are usually displayed immediately and the process is over. This, of course, is not always the case as there are sometimes delays due to the volume of requests. Nevertheless, the whole process typically takes less than a couple of minutes.

The Rise Of Platforms Like Google Ad Manager

One of the more recent developments in the ad space has been the creation of ad management platforms like Google Ad Manager. Essentially, these platforms allow for the centralised management of ad campaigns across multiple channels. 

Imagine if you could access all the tools you need in one place, including retargeting, email marketing, and ad performance measurement. That would be pretty cool, right?

Previously, if an advertiser wanted to run an email marketing campaign or retargeting campaign, they would have to set up a separate tool for each channel. With Google Ad Manager, all of this can be managed from one platform, which makes it a lot easier to set up and maintain.

In addition, since everything is accessible from one dashboard, it also makes the whole process a lot easier to follow.

Similarly, ad performance measurement has become much easier to perform with the advent of tools like Google Analytics. The fact that these tools can be integrated into the platform means that advertisers can track the success of their campaigns across different channels with one single view.

This, in turn, helps them to measure the effectiveness of their ad spending and determine what works and what needs to be changed. So, platform tools like Google Ad Manager can help with this as well by providing a centralised hub for storing and analysing customer data.

If you’re interested in exploring Google Ad Manager, you can request a free trial here. Alternatively, if you’d like to learn more, you can visit the Google Ad Manager website to get started.

The Future Of Real-Time Bidding

Even more exciting is that the future of RTB (Real-Time Bidding) seems to be heading in a different direction. Since the pandemic began, people have become a lot more interested in staying at home and consuming content online. As a result, many websites and magazines have shifted to online-only models. This has caused a shift in the way advertisers are engaging with consumers as well.

Traditional print models like newspapers and magazines have become a lot less attractive as people are simply accessing content online through their phones or laptops. According to HubSpot Blogs research, 11% of respondents said they avoid magazines and newspapers because they find it difficult to read online. Similarly, 6% said they only read digital copies of magazines.

This trend is likely to continue as more and more people use their mobile devices to access content online. As a result, more advertisers are turning to online-based platforms to reach their audience. Even Facebook, one of the biggest and most popular social media platforms, now has a section for online-only content. It’s clear that consumers are seeking content and advertisements that they can read on their phones and tablets rather than on a PC or laptop.

It seems that the future of advertising is moving towards online-only platforms and away from traditional models. Fortunately, this also means that advertisers are seeking to engage with their audience in new ways and through new channels, which presents new opportunities for advertisers.

 

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